Europe's Enron -- Parmalat and the Vanishing $5 Billion

[DAVOUT]

Excerpt from a CNN article :

"Auditors need to make sure they are looking at real documents, in addition to photocopies and faxes, and they should be confirming as much as possible with outside parties like banks, customers and so forth," said Craig Greene, a Certified Fraud Examiner specializing in financial investigations and founding partner of Chicago accounting firm McGovern & Greene.

"Those standards should have been adhered to, they (the auditors) clearly did not do their job," said Greene.

The audit firm will have to choose between incompetence or complicity.

[DAVOUT]

Originally posted by Big Crunch

It doesn't help that auditors are generally not liable for failing to detect fraud or deliberate deception in accounts*. The concept of auditing is all a bit of a joke really, considering.

*In many instances even if they are aware of it they are not required to report it, unless it relates to soemthing like terrorism. They are simply advised to decline to sign off the audit report or accounts.

In fact, our law on corporate business makes an obligation for the auditors to report to penal justice any fraud identified. It is delictuous not to do so.

Actually it is rarely done, because the biggest frauds are hidden behind technicalities.

[Nubclear]

This proves that Paris is the capital of all the crime in the world and Washington stands for righteousness and goodness.
By extension this also proves that Reagan is a god, Bush is a saint, and Ken Lay is a prophet.

All hail!

[Ted Striker]

Well said Commie

[Lefty Scaevola]

It shure took a hell of a lot more paper and convoluted partnerships to fool Enron's auditors and the SEC than it did to fool Parmalt's oversight. The USA guys must be more shophisticated..

[Dauphin]

Originally posted by JohnT
I have no knowledge of international finance, but shouldn't a third-party document (especially one "worth" $4 billion) presented by a primary party to another primary party require at least a phone call for verification purposes? "Hey, Parmalat sez they have a $4 billion account with you. Is that so?"

Whenever I phoned banks to confirm audit letters they gave me a big run around. I remember once I got redirected about 15 times only to redirected to the person I originally rang.

Maybe they'll use the "We couldn't get through" excuse to explain why they didn't get confirmation.

[JohnT]

But at least you phoned the bank.

[pchang]

15 years

Parmalat fraud may have been perpetrated over a period of 15 years. The final numbers may be as large as $12billion USD. Enron are rank beginners compared to this.

[Ecthy]

Originally posted by KrazyHorse
I drink Parmalat milk.

And I've never heard of Parmalat before.

[TCO]

Where is that litte-brother, dicksize obvessiesed sophist, snail shell dweller Roland?

[Ted Striker]

Dude you are on a roll

But that is a good question actually.

[JimmyCracksCorn]

Originally posted by DAVOUT
It seems to me that the poor Italians are innocent victims of a plot organized by America (Bank of) and Deloitte & Touche.

Wow, your xenophobia knows no bounds, does it?

[JohnT]

I didn't see that... that's pretty funny, DAVOUT.

[pchang]

Arrests

Calisto Tanzi was arrested. Perhaps as many as 20 to face criminal charges.

[pchang]

http://www.cnn.com/2003/WORLD/europe/12/31/parmalat.arrests/index.html

Parmalat chief a broken man.